PSALM declares failure of bidding on Malaya power plant

By Alena Mae S. Flores – September 18, 2019 at 07:15 pm

State-run Power Sector Assets and Liabilities Management Corp. on Wednesday declared a failure of bidding on the 650-megawatt Malaya thermal power plant in Pililla, Rizal after only one group submitted an offer.

“Unfortunately, PSALM was constrained to declare a failure of bidding during the public bidding held for the Malaya plant. This was because there was only one bidder that submitted a bid,” PSALM president Irene Garcia said.

PSALM held the bidding for the Malaya facility Wednesday but only AC Energy Inc. of Ayala Corp. submitted a bid.

“Under the PSALM bidding procedures, if only one bid is received by PSALM by the bid submission deadline, then there will be a failure of bidding. There were actually four qualified bidders for Malaya, but only AC Energy Inc. submitted a bid,” Garcia said.

The other pre-qualified bidders for the Malaya power plant bidding were DMCI Power Corp., D.M. Wenceslao and Associations Inc. and FGEN Reliable Energy Holdings Inc.

D.M. Wenceslao & Associates Inc. sent a letter to inform PSALM about its decision to withdraw from the bidding supposedly “due to current market conditions and uncertainty of supply of fuel.”

FGEN Reliable Energy Holdings Inc. and DMCI Power Corp. did not state their reasons for not pursuing their interest in Malaya facility.

“We will immediately prepare for the second round of bidding as soon as we submit the matter to the PSALM board,” Garcia said.

“PSALM will commence the second round of bidding as soon as possible once the schedule is cleared with the board. While it is unfortunate that the bidding failed, PSALM remains very much committed to privatize the Malaya power plant this year. Failure of the first round of bidding will not deter us from trying again, and again, until we are able to successfully dispose of this asset,” she said.

The Malaya plant consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler. It serves as a must-run unit which means it is required to run when supply is tight.

PSALM was supposed to bid out the facility as early as March 2017, but it was put on hold after the Energy Department decided to include in the bidding the option to convert the plant into a facility running on liquefied natural gas. That plan did not push through.

PSALM tapped PwC Philippines for the plant valuation and its underlying land in Rizal in the hopes of getting a more reflective and updated valuation.

PwC Philippines scored highest among three competing consultancy firms during the negotiated procurement anchored on a quality-based evaluation procedure that PSALM conducted in March.